As a shareholder, dividends are income. Cash going in to your account that is taxed immediately. A stock buyback of 1000 shares means that your one share now r

As a shareholder, dividends are income. Cash going in to your account that is taxed immediately. A stock buyback of 1000 shares means that your one share now represents 1/999,000th of the company, not 1/1,000,000th. Thus the share is worth more. It isn't income until you sell the share and pay taxes on the gains. This flexibility is useful and can result in tax savings depending on the situation.